Business
General Motors (GM) Calms Investors Amid Electric Vehicle Concerns: A Strategic Outlook for 2025
General Motors (GM) is set to reassure investors that there is no cause for alarm regarding the slowing demand for electric vehicles (EVs). In fact, the company is optimistic about improving its profitability by 2025. This new message, expected to be delivered at GM’s upcoming investor day, contrasts with the ambitious goals outlined by CEO Mary Barra in 2021. At that time, Barra projected doubling the company’s revenue to $280 billion by 2030, largely driven by the growth of its EV lineup and its autonomous vehicle unit, Cruise.
Changing Market Conditions and Investor Concerns
The automotive industry is currently navigating turbulent waters, with various factors contributing to investor unease. Concerns have grown over profitability in the EV sector, as automakers face significant losses in EV investments while witnessing declining sales in gas-powered vehicles. Additionally, increased competition from Chinese automakers like BYD has created further pressure on the industry. As a result, many automakers, including GM, have adjusted their strategies to reflect the slower-than-expected transition to electric vehicles.
GM’s Focus on Stability Over Aggressive Growth
At the upcoming investor day, GM will likely emphasize stability over aggressive growth in the EV market. Rory Harvey, GM’s president of global markets, hinted at a strong third-quarter performance, which serves as a positive platform for future discussions. However, according to sources familiar with the matter, GM will stress that EV profit margins are getting closer to investor expectations and may even match those of internal combustion engine (ICE) vehicles in the near future.
Highlighting ICE Models for Profit Growth
While GM will address its EV strategy, it will also place a heavy focus on its ICE vehicles. The automaker is set to launch eight refreshed SUV models by the end of 2025, including the Chevrolet Equinox, Buick Enclave, and Cadillac Escalade. GM believes these new launches will improve profit margins on its traditional gas-powered models, alleviating some concerns about the declining demand for ICE vehicles.
No Changes to Dividends or Stock Buybacks
Despite the positive outlook on profitability, sources have indicated that GM will not announce any changes to its dividend payments or stock buyback program during the investor meeting. This cautious approach reflects GM’s desire to maintain financial stability while navigating the evolving automotive landscape.
Addressing Broader Market Challenges and Investor Sentiment
GM’s investor concerns are not limited to EV profitability. Broader issues in the U.S. auto market, such as rising inventories, affordability challenges, and increasing competition from Chinese automakers, have contributed to the decline in GM’s stock price. Even as the company raises its earnings guidance and delivers positive quarterly results, investors remain wary.
The Importance of Sustainable EV Investment
One key concern among investors is the fear that EV investments could become a financial burden if they do not lead to sustainable profits. Tim Piechowski, a portfolio manager at ACR Alpine Capital Research and a GM investor, emphasized the need for the company to carefully manage its capital expenditures and research and development (R&D) investments in EV technology. He noted that many shareholders want GM to be cautious in investing in technologies that have not yet proven their long-term profitability.
Challenges in China and Cruise Operations
Two former strengths for GM—its operations in China and its autonomous vehicle unit, Cruise—have now become sources of concern for investors. GM has faced significant challenges in China, once a key profit center for the company. CEO Mary Barra recently described the automaker’s Chinese operations as “unsustainable” without major restructuring efforts. GM reported a $104 million loss in the region during the second quarter of 2023, reflecting the growing difficulties in that market.
Cruise Faces Scrutiny
GM’s Cruise unit, which once promised to be a driver of future revenue growth, has also faced setbacks. After an incident in which one of its robotaxis dragged a pedestrian in San Francisco, Cruise’s autonomous operations were suspended. Since then, GM has reintroduced a limited fleet of human-driven vehicles in select U.S. markets. Investors are eager for updates on how GM plans to move forward with Cruise and autonomous technology in general.
GM’s Strategy for Competing in the EV Market
As GM continues to compete with industry leaders like Tesla and Chinese EV manufacturers, its strategy for reducing EV production costs and improving affordability will be a key topic at the investor event. Last month, GM and Hyundai signed a non-binding memorandum of understanding to explore collaboration opportunities. The partnership aims to leverage the companies’ combined strengths to reduce costs and accelerate the delivery of new vehicle technologies to customers.
A Closer Look at Ultium Battery Technology
A central focus of GM’s investor day will be its Ultium battery technology, which powers its latest EV models. Investors will tour GM’s Tennessee battery and EV assembly operations, gaining insight into the company’s advancements in battery technology. GM’s ability to innovate in this area is crucial to its competitiveness in the EV market, where lowering battery costs and increasing range are essential to success.
Conclusion
As General Motors looks ahead to 2025, the company is shifting its narrative from aggressive growth to stability and profitability in both its electric and internal combustion engine vehicles. While the transition to electric vehicles may be slower than initially expected, GM is confident in its ability to navigate these challenges and reassure investors. By addressing key concerns related to EV profitability, ICE vehicle launches, and market competition, GM aims to build long-term value and strengthen its position in the evolving automotive landscape.
Business
Thailand Commits to Becoming an AI Learning Hub
Ministers Announce Plans for AI Governance Collaboration
Thailand is dedicated to advancing global trust in artificial intelligence (AI) governance and establishing itself as a learning hub for AI through collaboration with UNESCO, according to Prasert Jantararuangthong, the Minister of Digital Economy and Society (DES). This initiative aims to enhance the ethical application of AI technologies while fostering skilled professionals in the field.
Goals for AI Workforce Development
The Ministry of Higher Education, Science, Research and Innovation (MHESI) has set ambitious goals to increase the number of AI-skilled workers by adding 30,000 engineers over the next three years. This plan includes generating 100 AI innovations valued at 40 billion baht and promoting AI adoption across 600 agencies nationwide.
Significant Increase in AI Adoption Rates
According to the AI Readiness Measurement 2024 report by the Electronic Transactions Development Agency and the National Science and Technology Development Agency, AI adoption plans among Thai organizations have reached 73.3%, reflecting an increase of nearly 20 percentage points year-on-year. This surge indicates a growing recognition of the importance of AI in various sectors.
Hosting the UNESCO Global Forum on AI Ethics
On Wednesday, the DES Ministry, MHESI, the Education Ministry, and UNESCO announced their partnership to host the 3rd UNESCO Global Forum on the Ethics of AI 2025, themed “Ethical Governance of AI in Motion.” This event is scheduled to take place from June 24 to 27, 2025, in Bangkok and will serve as a platform for knowledge exchange and collaboration on AI governance.
Commitment to Ethical AI Implementation
Prasert emphasized that Thailand’s commitment aligns with UNESCO’s AI Readiness Assessment framework, which is recognized globally. The country has recently introduced key frameworks such as the AI Governance Guideline for Executives and the Generative AI Governance Guideline for Organizations. These resources aim to ensure responsible and transparent implementation of AI at all organizational levels.
Multilateral Collaboration for Developing Countries
The upcoming forum is expected to foster multilateral collaboration and build AI governance capacity in developing countries. It highlights Thailand’s dedication to global trust in AI governance while positioning itself as a leader in ethical AI practices.
Integration of AI Technologies Across Industries
Suphachai Jaismut, vice-minister for MHESI, stated that Thailand is prepared to integrate AI technologies across various industries, driven by a commitment to advancing research and development (R&D). This integration is crucial as Southeast Asia’s digital economy continues to grow rapidly.
Addressing Challenges in the Digital Economy
While advancements in AI infrastructure are promising, challenges such as the digital divide and job displacement due to automation remain significant concerns. Xing Qu, deputy director-general for UNESCO, emphasized that building peace through education, science, and culture is vital in an era where AI increasingly influences societies and economies.
Business
Thailand to Finalise Free Trade Agreement with EFTA by January 2024
Thailand is preparing to finalise a landmark Free Trade Agreement (FTA) with the European Free Trade Association (EFTA) by January 2024. The agreement marks Thailand’s first FTA with a European trade bloc and is expected to bolster exports, attract investments, and enhance Thailand’s position in the global economy.
EFTA Partnership: A Milestone in Thailand’s Trade Strategy
Who Are EFTA Members?
The EFTA comprises Switzerland, Norway, Iceland, and Liechtenstein, offering Thailand access to lucrative European markets.
Commerce Minister Pichai Naripthaphan highlighted the FTA’s importance, describing it as a pivotal step for economic growth and trade expansion.
“This is Thailand’s inaugural FTA with a European bloc, setting a precedent for modern trade standards and sustainable development goals,” said Pichai.
Comprehensive Scope of the Agreement
What Does the FTA Cover?
The FTA includes 15 broad areas designed to modernise trade relations and foster sustainable development. Key areas include:
- Trade in Goods
- Rules of Origin
- Investment Opportunities
- Trade Facilitation
- Intellectual Property Rights
- Sustainability and SMEs Development
Future Expansion Opportunities
The FTA is seen as a stepping stone toward future trade agreements with other significant partners, including the European Union, advancing Thailand’s global trade ambitions.
Economic Impact of the Thailand-EFTA Trade Partnership
Surging Trade Figures
Between January and October 2023, trade between Thailand and the EFTA exceeded US$10 billion, accounting for 2.03% of Thailand’s global trade and reflecting a 23.22% year-on-year growth.
Key Thai Exports and Imports
- Exports to EFTA: Jewellery, watches, canned seafood, machinery, cosmetics, and rice.
- Imports from EFTA: Gems, gold, pharmaceuticals, scientific equipment, and fresh seafood.
The agreement is expected to further diversify and increase Thailand’s trade portfolio.
Next Steps: Approval and Implementation
High-Level Signing at WEF Davos
The FTA will be presented to the Thai Cabinet for approval before its official signing at the World Economic Forum (WEF) in Davos, Switzerland, in January 2024. Prime Minister Paetongtarn Shinawatra and Commerce Minister Pichai will attend the signing ceremony.
Ratification and Rollout
Following Parliamentary approval, the agreement will be ratified, paving the way for implementation and significant contributions to Thailand’s GDP growth.
A Strategic Vision for Thailand’s Future
The Thailand-EFTA Free Trade Agreement aligns with Prime Minister Paetongtarn Shinawatra’s vision of positioning Thailand as a global trade hub. By establishing this partnership, Thailand is set to achieve:
- Increased export opportunities
- Enhanced foreign investment
- Strengthened trade ties with Europe
As the January deadline approaches, Thailand’s first European trade agreement symbolizes a bold step toward economic transformation, underscoring its commitment to modernisation, sustainability, and global collaboration.
Business
Thai Airways Secures 44 Billion Baht to Propel Post-Rehabilitation Future
Thai Airways International (THAI) has secured approximately 44 billion baht through a share rights offering, marking a significant milestone in its recovery journey. The move is set to bring the national carrier closer to exiting its court-supervised debt restructuring process and resuming stock trading by mid-2025.
Thai Airways Share Rights Offering: A Major Step Forward
Raising Capital Through Share Sales
Thai Airways is offering 9.82 billion new shares to existing shareholders at 4.48 baht per share. This capital infusion represents the final phase of its restructuring, aimed at ensuring financial stability and market re-entry.
“This marks a critical step before the airline resumes operations as a publicly traded entity,” said a Cabinet source.
Government’s Role: Strategic Investment Without State Enterprise Status
Maintaining a National Flag Carrier
The Thai government has announced plans to increase its investment in Thai Airways while ensuring it does not revert to a state enterprise.
- Current Stake: The Finance Ministry holds 47.9% of THAI shares.
- Post-Restructuring: The ministry, the Vayupak Fund, and the Government Savings Bank will collectively own around 40% of the airline.
“This structure ensures Thai Airways remains a national flag carrier while avoiding direct state control,” confirmed Finance Minister Pichai Chunhavajira.
Debt Conversion and Shareholder Dynamics
Debt-to-Equity Swap Secures Creditor Support
Thai Airways’ creditors have agreed to convert approximately 53 billion baht of debt into equity as part of the rehabilitation plan. This move aligns with THAI’s efforts to stabilize its financial position.
- The Council of State approved the recapitalization as a legitimate component of the restructuring process.
- Despite debates over the Finance Ministry’s voting rights during the creditor meetings, officials clarified that the debt-to-equity swap remains incomplete, allowing the ministry to retain creditor status.
Path to Recovery
- THAI is expected to exit rehabilitation by February 2025.
- The airline plans to resume stock trading by May 2025, paving the way for a return to the public market.
Broader Implications for Thai Airways
Strengthened Financial Position
The successful share rights offering bolsters Thai Airways’ financial resilience, ensuring the airline’s ability to navigate post-rehabilitation challenges.
National Pride and Strategic Vision
The government’s balanced approach highlights its commitment to preserving Thai Airways’ status as a national carrier while encouraging operational independence.
Soaring Toward a Brighter Future
Thai Airways’ 44 billion baht share rights offering symbolizes its steady progress toward financial recovery and operational excellence. With strong government support and strategic restructuring, the airline is poised to regain its position as a leading player in the global aviation market by 2025. This pivotal moment underscores THAI’s resilience and its importance to Thailand’s economic and cultural identity.
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